Overview
- Jerome Powell said the Justice Department served grand jury subpoenas on Jan. 9 tied to his 2025 testimony about a $2.5 billion Fed headquarters renovation, calling the case retaliation aimed at forcing rate cuts.
- Jeanine Pirro publicly defended the investigation as legitimate and said no one is above the law, while an anonymous account reported she did not seek approval from DOJ superiors and plans to continue the probe.
- President Trump intensified criticism of Powell and backed scrutiny of renovation overruns, even as he has said he was not aware of the investigation before it surfaced.
- Pushback widened as 11 central bank chiefs declared solidarity with Powell and Republican senators Thom Tillis and Lisa Murkowski vowed to block Fed nominees until the inquiry is resolved.
- Markets have been relatively steady, though JPMorgan’s Jamie Dimon and other analysts warned that undermining Fed autonomy could raise inflation expectations, unsettle the dollar and complicate the Fed succession.